DOJ starts probe of P9.56-B Mighty tax case

The Department of Justice (DOJ)  on Thursday started its preliminary investigation of the P9.56-billion tax evasion case the Bureau of Internal Revenue (BIR) filed against tobacco firm Mighty Corp.

State prosecutors received the counteraffidavits of four top executives of the company,  which was being accused of using counterfeit tax stamps on their products to evade excise taxes.

Leading the four Mighty executives is company owner Alexander Wongchuking, who filed his counteraffidavit in the company of his lawyer Sigfrid Fortun.

Wongchuking also stands as the company’s vice president for external affairs and assistant corporate secretary.

Retired general and Mighty president Edilberto Adan, retired judge and company executive vice president Oscar Barrientos and company treasurer Ernesto Victa also submitted their counteraffidavits.

The respondents submitted boxes of documents to the DOJ panel composed of prosecutors Sebastian Caponong, Ma. Lourdes Uy and Mary Ann Parong.

BIR lawyers were also present at the hearing that started around 2:30 p.m. and lasted less than an hour.

The justice department held the hearing even as the BIR prepared more complaints against the cigarette maker, which allegedly tried to evade taxes amounting from P27 billion to P30 billion.

In its complaint, the BIR accused the company of violating Sections 263 and 265(c) of the National Internal Revenue Code when it purportedly used bogus tax stamps on their products.

The BIR filed the charges after confiscating master cases of cigarettes, worth P2.3 billion, bearing fake tax stamps from Mighty Corp.’s warehouse in San Simon, Pampanga province, earlier this month.

The BIR said the mere possession of the cigarette packs with fake tax stamps was in itself a violation of the law.

According to the BIR, 87.5 percent of the 66,281 master cases, containing 33,140,500 cigarette packs, that was found in the warehouse had fake stamps.

The bureau pegged the aggregate excise tax liability of the company at P9.564 billion for the Pampanga raid.

Apart from the raid at Mighty’s warehouses in Pampanga, the BIR and the Bureau of Customs also discovered counterfeit stamps affixed on Mighty products in Zamboanga, General Santos City, Cebu, Tacloban City and Bulacan over the past two months.

Internal Revenue Commissioner Caesar Dulay said the BIR was preparing at least three more tax evasion cases against Mighty, adding that his agency seized three times more illicit cigarette packs during a raid in San Ildefonso, Bulacan.

The BIR is preparing to file a P27-billion to 30-billion tax evasion case for the Bulacan raid alone, he added.

While President Duterte was right in saying tax cases could be settled through a compromise deal, Dulay said it should be done through the established process.